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on Labor Markets - Supply, Demand, and Wages |
| By: | Gregory, Terry (IZA); Zierahn, Ulrich (ZEW Mannheim) |
| Abstract: | We investigate minimum wage spillovers by exploiting the first-time introduction of a minimum wage within a quasi-experiment in a context with an extraordinary large bite: the German roofing industry. We find positive wage spillovers for medium-skilled workers with wages just above the minimum wage, but negative effects for high-skilled top earners in East Germany, where the bite was particularly pronounced. There, the minimum wage lowered both returns to skills and skill supply. We propose a theoretical model according to which negative spillovers occur whenever a negative scale effect dominates a positive substitution effect and provide empirical support for our theory. |
| Keywords: | minimum wages, wage effects, spillover effects, wage restraints, returns to skills, unconditional quantile regression, scale effect, substitution effect, skill supply |
| JEL: | J31 J38 J24 C21 J23 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13633&r=all |
| By: | Johnsen, Julian V. (SNF, Bergen); Ku, Hyejin (University College London); Salvanes, Kjell G. (Norwegian School of Economics) |
| Abstract: | Does leave-taking matter for young workers' careers? If so, why? We propose the competition effect—relative leave status of workers affecting their relative standing inside the firm—as a new explanation. Exploiting a policy reform that exogenously assigned four-week paid paternity leave to some new fathers, we find evidence consistent with the competition effect: A worker enjoys a better post-child earnings trajectory when a larger share of his colleagues take leave because of the policy. In contrast, we find no direct earnings effect resulting from the worker's own leave when controlling for their relative leave eligibility status within the firm. |
| Keywords: | leave of absence, career interruptions, ranking, tournament, promotion, gender gap |
| JEL: | M51 M52 J16 J22 J24 J31 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13596&r=all |
| By: | Benjamin Bennett; Isil Erel; Léa H. Stern; Zexi Wang |
| Abstract: | We explore how lowering labor market frictions for female workers affects corporate performance. Using the staggered adoption of state-level Paid Family Leave acts, we provide causal evidence on the value created by relieving frictions to accessing female talent, for private and public firms. Reduced turnover and rising female leadership are potential mechanisms that contribute to performance gains. Across specifications, our estimates indicate that treated establishments’ productivity increases between 4% and 5% relative to neighbor control establishments. The treatment effect is larger when workers are in less religious counties and in those with more women of childbearing age. |
| JEL: | J16 J22 J24 J32 J78 M14 M51 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27788&r=all |
| By: | Blimpo, Moussa P. (University of Oklahoma); Pugatch, Todd (Oregon State University) |
| Abstract: | We assess, via an experiment across 207 secondary schools, how a comprehensive teacher training program affects the delivery of a major entrepreneurship curriculum reform in Rwanda. The reform introduced interactive pedagogy and a focus on business skills in the country's required upper secondary entrepreneurship course. In addition to the government's standard training, a random sample of schools received intensive training organized by an NGO for two years. The training consisted of (i) six training sessions during school breaks, ii) exchange visits each term where teachers provided feedback to their peers, and (iii) outreach and support from NGO staff at least twice per year. The program increased teachers' use of active instruction, consistent with the reform's features. These effects on pedagogy did not translate into improvements in student academic outcomes or skills. Treated students increased their participation in businesses by 5 percentage points, or 17% of the control mean, with a commensurate decrease in wage employment, and no effect on overall income. These results suggest substitution between entrepreneurship and employment among students in treated schools. |
| Keywords: | entrepreneurship education, teacher training, secondary school, pedagogy, randomized control trials, Rwanda |
| JEL: | I25 I26 I28 J24 O12 O15 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13634&r=all |
| By: | Christopher J. Cronin; Matthew P. Forsstrom; Nicholas W. Papageorge |
| Abstract: | Mounting evidence across disciplines shows that psychotherapy is more curative than antidepressants for mild-to-moderate depression and anxiety. Yet, few patients use it. This paper develops and estimates a structural model of dynamic decision-making to analyze mental health treatment choices in the context of depression and anxiety. The model incorporates myriad costs suggested in previous work as critical impediments to psychotherapy use. We also integrate links between mental health and labor outcomes to more fully capture the benefits of mental health improvements and the costs of psychotherapy. Finally, the model addresses measurement error in widely-used mental health variables. Using the estimated model, we find that mental health improvements are valuable, both directly through increased utility and indirectly through earnings. We also show that even though psychotherapy improves mental health, counterfactual policy changes, e.g., lowering the price or removing other costs, do very little to increase uptake. We highlight two conclusions. As patient reluctance to use psychotherapy is nearly impervious to a host of a priori reasonable policies, we need to look elsewhere to understand it (e.g., biases in beliefs about treatment effects, stigma, or other factors that are as yet unknown). More broadly, large benefits of psychotherapy estimated in randomized trials tell only half the story. If patients do not use the treatment outside of an experimental setting—and we fail to understand why or how to get them to—estimated treatment effects cannot be leveraged to improve population mental health or social welfare. |
| JEL: | I10 I12 J22 J24 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27711&r=all |
| By: | Ctirad Slavík; Hakki Yazici |
| Abstract: | The skill premium has increased significantly in the United States in the last five decades. During the same period, individual wage risk has also increased. This paper proposes a mechanism through which a rise in wage risk increases the skill premium. Intuitively, a rise in uninsured wage risk increases precautionary savings, thereby boosting capital accumulation, which increases the skill premium due to capital-skill complementarity. Using a quantitative macroeconomic model, we find that the rise in wage risk observed between 1967 and 2010 increases the skill premium significantly. This finding is robust across a variety of model specifications. |
| Keywords: | skill premium, wage risk, capital-skill complementarity, precautionary savings |
| JEL: | E25 J31 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8520&r=all |
| By: | Thomas Astebro; Serguey Braguinsky; Yuheng Ding |
| Abstract: | We document that since 1997, the rate of startup formation has precipitously declined for firms operated by U.S. PhD recipients in science and engineering. These are supposedly the source of some of our best new technological and business opportunities. We link this to an increasing burden of knowledge by documenting a long-term earnings decline by founders, especially less experienced founders, greater work complexity in R&D, and more administrative work. The results suggest that established firms are better positioned to cope with the increasing burden of knowledge, in particular through the design of knowledge hierarchies, explaining why new firm entry has declined for high-tech, high-opportunity startups. |
| JEL: | J24 J3 O3 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27787&r=all |
| By: | Charly Porcher; Hannah Rubinton; Clara Santamaría |
| Abstract: | Both large establishments and large cities are known to offer workers an earnings premium. In this paper, we show that these two premia are closely linked by documenting a new fact: when workers move to a large city, they also move to larger establishments. We then ask how much of the city- size earnings premium can be attributed to transitions to larger and better-paying establishments. Using administrative data from Spain, we find that 38 percent of the city-size earnings premium can be explained by establishment-size composition. Most of the gains from the transition to larger establishments realize in the short-term upon moving to the large city. Establishment size explains 29 percent of the short-term gains, but only 5 percent of the medium-term gains that accrue as workers gain experience in the large city. The small contribution to the medium-term gains is due to two facts: first, within large cities workers transition to large establishments only slightly faster than in smaller cities; second, the relationship between earnings and establishment size is weaker in large cities. |
| Keywords: | City-size wage premium; Establishment-size wage premium |
| JEL: | R12 |
| Date: | 2020–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:88708&r=all |
| By: | Laura A Harvey (University of East Anglia); James Rockey (University of Leicester) |
| Abstract: | While real US GDP per capita has increased around 80% since 1980, median incomes have remained roughly constant. However, as this paper documents, this stagnation masks an important decline. Male median real incomes have been lower than that of their forebears, at every age, for the last 30 years. We show that this is true across the life cycle and across the wage distribution. Moreover, younger generations have also had to wait longer to reach peak earnings. Further analysis shows that this decline is particularly concentrated on high school graduates. The same pattern is found for female high school graduates yet, African American and Hispanic American women are an important exception. Variance decompositions suggest that these intergenerational differences are quantitatively important. While reductions in hours worked cannot explain the decline, substantial decreases in the labour share are consistent with decreasing incomes in the face of productivity growth. Calculations suggest that hedonic improvements in the quality of goods and services would have to have been equivalent to 30% of younger cohorts’ lifetime consumption for their consumption levels to match those of their predecessors |
| Keywords: | Wages, Intergenerational Differences, Labour Share, Stagnation, Jobs |
| JEL: | E24 J24 J31 D33 D31 |
| Date: | 2020–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaeco:2020-04&r=all |
| By: | Kyui, Natalia (Bank of Canada); Radchenko, Natalia (American University) |
| Abstract: | We can observe several common trends related to higher education in many countries. First, there is expansion of higher education with a shift towards majoring in the social sciences. And second, there is growing inequality among college graduates in the labor market. In Russia, these trends have been present but with an amplified magnitude in recent years. Constructing a unique data set using open-ended responses to the Russian Longitudinal Monitoring Survey, we use the Russian case to examine the effects of the changing composition of academic majors during expansion of higher education on the dynamics of wage distribution. This paper contains several contributions to the literature. First, we extend standard wage analysis across majors by exploring within-major and across-cohort variation, as well as major-specific permanent and transitory variance components and their time paths. We show that the evolving distribution of wages relates to both changes in skill prices and wage shocks induced by economic fluctuations. Next, we show that variation in skill prices relates to equilibrium effects induced by changes in the supply of graduates specialized in different fields. Uneven expansion in certain majors induces labor market saturation and leads to an increase in the wage variance of graduates from the fastest growing majors. Finally, we point out the importance of accounting for within-major heterogeneity across cohorts, which could reflect differences in student ability distribution, changes in academic content, and changes in educational quality over time. |
| Keywords: | returns to academic majors, wage dynamics and inequality, structural analysis of wage variance |
| JEL: | I2 J31 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13591&r=all |
| By: | Bellemare, Charles (Université Laval); Goussé, Marion (Université Laval); Lacroix, Guy (Université Laval); Marchand, Steeve (Université Laval) |
| Abstract: | We evaluate the efficiency of video resumes using a large scale field experiment. We randomly sent applications to 2021 private firms posting vacancies across the province of Québec (Canada). A subset of these applications included a link inviting firms to view a video resume. We find that video resumes increase callback rates by more than 10 percentage points. We also evaluate the service for individuals with acute visible disabilities (wheelchair users). Although our results support the presence of discrimination in the labor market, we show that they benefit from video resumes as much as applicants without a disability. |
| Keywords: | video resume, job search, disabilities, discrimination |
| JEL: | J71 J68 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13656&r=all |
| By: | Owen, Ann L.; Wei, Andrew |
| Abstract: | Using Google Trends data to identify hostile sexism, we find that sexism explains about 8 cents (or 41 percent) of the residual gender wage gap, the wage gap after controlling for education, occupation, industry, and age. We find evidence for a direct effect of sexism consistent with labor market discrimination and an indirect effect that works through social outcomes that reduce hours worked which itself directly affects wages. Consistent with theories of discrimination, the direct impact of sexism is greater for women who are less educated, work in less competitive industries, and work in industries with fewer female workers. |
| Keywords: | gender wage gap, sexism, discrimination |
| JEL: | J10 J31 J71 |
| Date: | 2020–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:102474&r=all |
| By: | Jacob Bastian; Lance Lochner |
| Abstract: | Parents spend considerable sums investing in their children's development, with their own time among the most important forms of investment. Given well-documented effects of the Earned Income Tax Credit (EITC) on maternal labor supply, it is natural to ask how the EITC affects other time allocation decisions, especially time with children. We use the American Time Use Surveys to study the effects of EITC expansions since 2003 on time devoted to a broad array of activities, with considerable attention to the amount and nature of time spent with children. Our results confirm prior evidence that the EITC increases maternal work and reduces time devoted to home production and leisure. More novel, we show that the EITC also reduces time spent with children; however, almost none of the reduction comes from time devoted to ``investment'' activities. Effects are concentrated among socioeconomically disadvantaged mothers, especially those that are unmarried. Results are also most apparent for mothers of young children. Altogether, our results suggest that the increased work associated with EITC expansions over time has done little to reduce the time mothers devote to active learning and development activities with their children. |
| JEL: | D13 H24 H31 H53 I31 I38 J13 J22 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27717&r=all |
| By: | Averkamp, Dorothée (University of Wuppertal); Bredemeier, Christian (University of Wuppertal); Juessen, Falko (University of Wuppertal) |
| Abstract: | We show that parts of the unexplained wage gap in standard Oaxaca-Blinder decompositions result from the neglect of the role played by the family for individual wages. We present a simple model of dual-earner households facing a trade-off regarding whose career to promote and show analytically that the standard Oaxaca-Blinder approach overestimates the degree of pay discrimination. Unbiased decompositions can be obtained when the Oaxaca-Blinder wage equation is augmented by the characteristics of the individual's partner. In an empirical application, we find that this extended decomposition explains considerably larger shares of the gender wage gap than does the standard decomposition. |
| Keywords: | Oaxaca-Blinder, gender wage gap, dual-earner households, discrimination |
| JEL: | J31 J16 J12 J71 J24 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13601&r=all |
| By: | Gries, Thomas (University of Paderborn); Naudé, Wim (RWTH Aachen University) |
| Abstract: | The economic impact of Articial Intelligence (AI) is studied using a (semi) endogenous growth model with two novel features. First, the task approach from labor economics is reformulated and integrated into a growth model. Second, the standard representative household assumption is rejected, so that aggregate demand restrictions can be introduced. With these novel features it is shown that (i) AI automation can decrease the share of labor income no matter the size of the elasticity of substitution between AI and labor, and (ii) when this elasticity is high, AI will unambiguously reduce aggregate demand and slow down GDP growth, even in the face of the positive technology shock that AI entails. If the elasticity of substitution is low, then GDP, productivity and wage growth may however still slow down, because the economy will then fail to benefit from the supply-side driven capacity expansion potential that AI can deliver. The model can thus explain why advanced countries tend to experience, despite much AI hype, the simultaneous existence of rather high employment with stagnating wages, productivity, and GDP. |
| Keywords: | technology, artificial intelligence, productivity, labor demand, income distribution, growth theory |
| JEL: | O47 O33 J24 E21 E25 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13606&r=all |
| By: | Pons Rotger, Gabriel (VIVE - The Danish Centre for Applied Social Science); Rosholm, Michael (Aarhus University) |
| Abstract: | This paper makes use of the randomized allocation of workers on sick leave in Denmark into self-management support, to examine the role of beliefs about control for prolonged absenteeism due to illness. Our results demonstrate that the ability of the intervention to lead sick-listed workers toward resuming employment crucially depends on workers' control beliefs. The intervention increases the perception of control among control pessimists and substantially accelerates the decision to return to work. Furthermore, we identify a group of control-optimist workers for whom "learning" about control beliefs is self-defeating, and leads them toward reduced capacity in terms of return-to-work performance. |
| Keywords: | sickness insurance, personality traits, randomized control trial, machine learning |
| JEL: | J21 C93 D91 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13582&r=all |
| By: | Gaudecker, Hans-Martin von (University of Bonn); Holler, Radost (Bonn Graduate School of Economics); Janys, Lena (University of Bonn); Siflinger, Bettina M. (Tilburg University); Zimpelmann, Christian (IZA) |
| Abstract: | We document the evolution of hours of work using monthly data from February to June 2020. During this period, the Netherlands experienced a quick spread of the SARS-CoV-2 virus, enacted a lockdown for a period of six weeks and gradually opened thereafter. We show that during lock-down, substitutability between work from home and at the workplace or essential worker status are key to maintain a large fraction of pre-crisis hours of work. These pandemic-specific mechanisms become much less important as social distancing restrictions are eased in May and June. Labor supply recovers quickly in sectors affected heavily during lockdown, but goes down in other areas of the economy. The latter is unlikely caused by pandemic-induced supply changes; diminished demand is a more plausible explanation. Analyzing take-up of economic support programs, we find suggestive evidence that wage subsidies and other programs helped limit the early-stage impact of the crisis along the extensive margin. |
| Keywords: | hours of work, telecommuting, essential workers, labor hoarding, COVID-19 |
| JEL: | J2 H3 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13623&r=all |
| By: | Della Giusta, Marina (University of Reading); Longhi, Simonetta (University of Reading) |
| Abstract: | Several reforms increased the state pension age (SPA) in the UK and equalised it to age 65 for both men and women. We use panel data and a difference-in-difference approach to comprehensively analyse the direct and indirect effects of these reforms, investigating mechanisms for indirect effects. We also analyse the heterogeneity of the effects of smaller versus larger increases in SPA, by partnership status, as well as spill-over effects to male partners. Consistent with previous research, we find a positive impact of the reform on employment and labour force participation, but also large negative impacts on various aspects of personal, financial, and mental wellbeing. The effect is larger for women who have to wait longer to reach their SPA, and smaller for women with a partner (compared to those without a partner). The effect of the reform partially spills over to affected women partner's labour market participation. Our results can be generalised to other countries that are seeking to implement similar reforms. |
| Keywords: | policy reform, retirement, labour supply, care supply, leisure, wellbeing |
| JEL: | I31 J22 J26 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13587&r=all |
| By: | Gamage, Danula K. (Queen Mary, University of London); Kavetsos, Georgios (Queen Mary, University of London); Mallick, Sushanta (Queen Mary, University of London); Sevilla, Almudena (University College London) |
| Abstract: | Given the ongoing efforts to close the gender pay gap across different sectors in the UK, this paper investigates the impact of a pay transparency initiative on the gender pay gap in the university sector, focusing on the Russell Group of top-tier universities. The initiative, introduced in 2007, enabled public access to mean salaries of men and women in UK universities. Using a rich individual-level administrative dataset and a difference-in-differences approach comparing men and women, we document several key findings. First, following the pay transparency intervention, the log of salaries of female academics increased by around 0.62 percentage points compared to male counterparts, reducing the gender pay gap by 4.37%. The effect is more pronounced considering a balanced sample (1.27 percentage points increase in female wages or an 11.59% fall in the gender pay gap). This fall in the pay gap is mostly driven by senior female academics negotiating higher wages and female academics moving to universities with equal opportunity. We do not find any evidence of pre-existing wage gap or the gender composition associated with the fall in the gender pay gap. |
| Keywords: | gender pay gap, pay transparency, higher education sector, wage level |
| JEL: | I23 J16 J31 J44 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13635&r=all |
| By: | Elizabeth Ananat (Duke University); Shihe Fu (Xiamen University); Stephen L. Ross (University of Connecticut) |
| Abstract: | Racial social isolation within workplaces may reduce firm productivity. We provide descriptive evidence that African-Americans feel socially isolated from whites. To test whether isolation affects productivity, we estimate models of Total Factor Productivity for manufacturing firms allowing the returns to concentrated economic activity and human capital to vary by the match between each establishment’s racial and ethnic composition and the composition of local area employment. Higher own-race representation increases the productivity return from employment density and concentrations of college educated workers. Looming demographic changes suggest that this drag on economic productivity may increase over time. |
| Keywords: | Agglomeration Economies; Firm Productivity; Human Capital Externalities; Information Networks; Racial and Ethnic Isolation |
| JEL: | J15 J24 L11 R12 R23 R32 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2020-15&r=all |
| By: | Nayoung Rim (United States Naval Academy); Roman Rivera (Columbia University); Andrea Kiss (Duke University); Bocar Ba (University of California, Irvine) |
| Abstract: | There is substantial evidence showing racial bias in firms' hiring decisions, but less is known about bias in career recognition or promotion, which may arguably be more important for the lack of diversity in upper-management positions and, ultimately, the racial wage gap. We construct a novel dataset of police nominations for awards to measure bias against minority employees in career recognition. Exploiting quasi-random variation in supervisor assignment, we find that white supervisors are less likely to nominate black officers for awards than white or Hispanic officers. Increased supervisor-officer interaction reduces, but does not eliminate, the black-white recognition gap. Furthermore, there are persistent benefits for white officers but not for black officers. We also conduct an online experiment and find respondents are less likely to acquire information about black officers relative to non-black officers. Our findings suggest bias in career recognition may be important for the black-white earnings gap and should be examined in further research. In regards to policing, our findings suggest that racial issues in policing are not just at issue between police and the public, but also within departments, and thus that simply hiring minority officers may be limited in its efficacy. |
| Keywords: | racial bias, police officers, award nominations, supervisors |
| JEL: | J71 M51 J45 J48 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2020-065&r=all |
| By: | Smith, Jeffrey A. (University of Wisconsin-Madison); Whalley, Alexander (University of Calgary); Wilcox, Nathaniel T. (Appalachian State University) |
| Abstract: | How well do program participants assess program performance ex-post? In this paper we compare participant evaluations based on survey responses to econometric impact estimates obtained using data from the experimental evaluation of the U.S. Job Training Partnership Act. We have two main findings: First, the participant evaluations are unrelated to the econometric impact estimates. Second, the participant evaluations do covary with impact proxies such as service intensity, outcome levels, and before-after outcome differences. Our results suggest that program participants behave as 'lay scientists' who seek to estimate the impact of the program but face cognitive challenges in doing so. |
| Keywords: | program evaluation, participant evaluation, surveys |
| JEL: | I28 J24 C83 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13584&r=all |
| By: | Shen, Kailing (Australian National University); Taska, Bledi (Burning Glass Technologies) |
| Abstract: | We propose a reweighting-estimation-transformation (RWET) approach to estimate the impacts of COVID-19 on job postings in Australia. Contrary to the commonly used aggregation-based method on counting data, our approach can be used in a relatively 'thin' market, such as Australia. In a thin market, the number of job postings is relatively small, and the share of empty cells increases substantially when aggregating the data into finer categories. Using Australian job postings collected by Burning Glass Technologies and the RWET approach, our empirical evidence shows that the overall labour demand in Australia as of July 2020 is slowly recovering from its lowest 45 per cent dip at the beginning of May. Our results also suggest that the impacts of the pandemic are relatively evenly distributed across skill levels, but vary substantially across states, industries and occupations. Our findings of the dynamics on the demand side of the labour market suggest that skill-targeted policies might not be as effective as policies targeted at the state and industry levels to facilitate economic recovery. |
| Keywords: | job posting, COVID-19, thin market |
| JEL: | J21 J63 C55 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13640&r=all |
| By: | Kampkötter, Patrick (University of Tübingen); Petters, Lea (University of Cologne); Sliwka, Dirk (University of Cologne) |
| Abstract: | We study the role of employees' identification to the employer for wage growth. We first show in a formal model that identification implies countervailing effects: Employees with higher identification are more valuable as they exert higher efforts, but have weaker bargaining positions, and less outside options as they search less. Analyzing a novel representative panel dataset, we find that stronger identification is associated with less job search and turnover. Workers that have higher identification exhibit significantly lower wage growth. In line with the model, this pattern tends to be reversed conditional on having obtained an external offer. |
| Keywords: | wage, affective commitment, identity, turnover, job search |
| JEL: | J31 M50 M52 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13624&r=all |
| By: | Asakawa, Shinsuke (Osaka University); Sasaki, Masaru (Osaka University) |
| Abstract: | We estimate the policy impacts of the resumption of income thresholds for childcare benefits (CB) policy in April 2012 on female labor market participation, expenditure on childcare services, and child health outcomes using the Longitudinal Survey of Newborns in the 21st Century in Japan. We use a regression discontinuity design and find that the reduction of CB payments in households where the annual income of the higher-earning exceeded their threshold encouraged mothers to start working as part-time workers or self-employed, both in terms of intensive and extensive margins of labor supply. Furthermore, we find that some mothers who started working as part-time workers because of the cuts in CB used to work full-time before giving birth and quit after giving birth. Even though the mothers resumed work outside the home, expenditure on childcare services and child health outcomes were little affected. Our results imply that the CB payments had a negative income effect on employment of mothers who used to work outside the home before giving birth and might prevent some mothers from pursuing their lifetime careers, especially among higher-income households. |
| Keywords: | childcare benefits policy, birth separation, child health, maternal re-employment, means test, regression discontinuity design |
| JEL: | J16 J21 J38 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13589&r=all |
| By: | Holger Sieg; Chamna Yoon; Jipeng Zhang |
| Abstract: | Using newly available data, we document that internal migrants do not enjoy the same access to local public goods and services as city residents in China. We estimate a spatial overlapping generations model with heterogeneous households to quantify the impact of the Hukou system on urban fiscal policies and access to educational opportunities. We find that migrants provide large fiscal externalities to all major cities. We show the feasibility of alternative internal migration policies that offer the potential of decreasing the inequality within China while at the same time increasing the overall level of human capital in the economy. |
| JEL: | E6 H7 I25 J24 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27764&r=all |
| By: | Martinez-Matute, Marta (Universidad Autónoma de Madrid); Urtasun, Alberto (Banco de España) |
| Abstract: | Uncertainty affects employers' decisions on labour workforce, as it does on capital. We exploit differences on how firms adjust their labour work-force when uncertainty increases. Using data from the Wage Dynamic Network Survey for 25 European countries, we first construct, opposite to usual aggregate indicators, a set of uncertainty indicators exploiting firms' microeconomic environment. We combine variability from the country, sector and size of the firm. Secondly, we investigate the effect of uncertainty on firms' strategies to adjust labour through hirings and rings. Results reveal that firms reduce hiring decisions and recur to individual layos more frequently when uncertainty increases. An increase of one point in the uncertainty indicator increases the probability of having frozen hiring in between 21% to 39%. We also find more significant effects when firms are facing credit constraints and labour adjustment costs are higher. |
| Keywords: | uncertainty, labour adjustment, firms' labour decisions, freeze hirings, layoffs |
| JEL: | D22 D81 J21 J23 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13645&r=all |
| By: | Ozkan Eren; Naci H. Mocan |
| Abstract: | Although there exists a large literature analyzing whether an individual’s peers have an impact on that individual’s own behavior and subsequent outcomes, there is paucity of research on whether peers influence a person’s decisions and judgments regarding a third party. We investigate whether consequential decisions made by judges are impacted by the gender composition of these judges’ peer group. We utilize the universe of decisions on juvenile defendants in each courthouse in Louisiana between 1998 and 2012. Leveraging random assignment of cases to judges, and variations in judge peer composition generated by elections, retirements, deaths and resignations, we show that an increase in the proportion of female peers in the courthouse causes a rise in individual judges’ propensity to incarcerate, and an increase in the assigned sentence length. This effect is fully driven by female judges. Further analysis suggests that this behavior is unlikely to be a reflection of an effort to conform to evolving norms of judicial stringency, measured by peers’ harshness in sentencing, but that it is due to the sheer exposure to female colleagues. |
| JEL: | D9 D91 J16 J71 K4 K41 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27713&r=all |
| By: | Johar, Meliyanni (University of Technology, Sydney); Johnston, David W. (Monash University); Shields, Michael A. (Monash University); Siminski, Peter (University of Technology, Sydney); Stavrunova, Olena (University of Technology, Sydney) |
| Abstract: | This paper studies how having your home damaged or destroyed by a natural disaster impacts on economic and financial outcomes. Our context is Australia, where disasters are frequent. Estimates of regression models with individual, area and time fixed-effects, applied to 10 waves of data (2009-2018), indicate that residential destruction has no average impact on employment and income, but increases financial hardship and financial risk aversion. These impacts are generally short-lived, larger for renters than home owners, and greater for smaller isolated disasters. Using a Group Fixed Effects estimator, we find that around 20% of the population have low resilience to financial shocks, and for these individuals we find a substantive increase in financial hardships. The most vulnerable are the young, single parents, those in poor health, those of lower socioeconomic status, and those with little social support. These results can help target government aid after future natural disasters to those with the greatest need. |
| Keywords: | natural disasters, financial hardship, risk aversion, mental health, resilience |
| JEL: | Q54 J21 I31 C23 H84 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13616&r=all |
| By: | Krista J. Ruffini; Aaron Sojourner; Abigail K. Wozniak |
| Abstract: | COVID symptom screening, a new workplace practice, is likely to affect many millions of American workers in the coming months. Eleven states already require and federal guidance recommends frequent screening of employees for infection symptoms. This paper provides some of the first empirical work exploring the tradeoffs employers face in using daily symptom screening. First, we find that common symptom checkers will likely screen out up to 7 percent of workers each day, depending on the measure used. Second, we find that the measures used will matter for three reasons: many respondents report any given symptom, survey design affects responses, and demographic groups report symptoms at different rates, even absent fluctuations in likely COVID exposure. This last pattern can potentially lead to disparate impacts, and is important from an equity standpoint. |
| JEL: | I1 J5 J7 K3 M5 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27792&r=all |
| By: | Oliveira, Gabriel Lyrio; Chagas, Andre Luis Squarize |
| Abstract: | In this paper, we present some long-term effects of the largest Conditional Cash Transfers program in the world, and one of the pioneers, the Bolsa Família Program (BFP). We focus on the effects on Schooling attained in early adulthood and Labor Market outcomes of individuals more or less exposed during their childhood. The estimates were enabled by linking identified data from Formal Labor Market, BFP Payment Records, and the Single Registry (SR). In this Natural Experiment, the main identification strategy relies on a rich set of control variables, and on the fact that the release of BFP resources for registered families is automatized and based on municipality poverty parameters estimated by the government. In an alternative identification strategy, we consider an instrumental variable, the observed proxy for the municipality effort to register vulnerable families. These strategies help to solve the potential selection bias of families to the SR, and consequently to the treatment. Nonetheless, since the program selects the most vulnerable families, the threats to the identification suggest that the estimates are lower bounds. Our main results show positive long-term effects on Schooling, and on the Formal Labor Market participation, while mixed results are observed for Earnings. Heterogeneity tests suggest that the effects are stronger for boys, for smaller cities, and for families with never formally employed parents. |
| Keywords: | Conditional Cash Transfers; Long-term effects; Human Capital; Labor Market; Bolsa Família |
| JEL: | I25 I38 J24 O15 |
| Date: | 2020–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2020wpecon16&r=all |
| By: | Kniesner, Thomas J. (Claremont Graduate University); Sullivan, Ryan (Naval Postgraduate School) |
| Abstract: | Our research estimates Covid-19 non-fatal economic losses in the U.S. using detailed data on cumulative cases and hospitalizations from January 22, 2020 to July 27, 2020, from the Centers for Disease Control and Prevention (CDC). As of July 27, 2020, the cumulative confirmed number of cases was about 4.2 million with almost 300,000 of them entailing hospitalizations. Due to data collection limitations the confirmed totals reported by the CDC under-count the actual number of cases and hospitalizations in the U.S. Using standard assumptions provided by the CDC, we estimate that as of July 27, 2020, the actual number of cumulative Covid-19 cases in the U.S. is about 47 million with almost 1 million involving hospitalizations. Applying value per statistical life (VSL) and relative severity/injury estimates from the Department of Transportation (DOT), we estimate an overall non-fatal unadjusted valuation of $2.2 trillion for the U.S. with a weighted average value of about $46,000 per case. This is almost 40% higher than the total valuation of $1.6 trillion (using about $11 million VSL from the DOT) for all approximately 147,000 Covid-19 fatalities. We also show a variety of estimates that adjust the non-fatal valuations by the dreaded and uncertainty aspect of Covid-19, age, income, and a factor related to fatality categorization. The adjustments show current overall non-fatal valuations ranging from about $1.5 trillion to about $9.6 trillion. Finally, we use CDC forecast data to estimate non-fatal valuations through November 2020, and find that the overall cumulative valuation increases from about $2.2 trillion to about $5.7 trillion or to about 30 percent of GDP. Because of the larger numbers of cases involved our calculations imply that non-fatal infections are as economically serious in the aggregate as ultimately fatal infections. |
| Keywords: | value of a statistical injury, VSI, value of a statistical life, VSL, COVID-19, pandemic, willingness to pay, benefit-cost analysis, CDC |
| JEL: | I18 J17 J28 H51 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13632&r=all |
| By: | Gaggero, Alessio (University of Nottingham); Tommasi, Denni (Monash University) |
| Abstract: | The link between time-of-day and productivity on cognitive tasks is crucial to understand workplace efficiency and welfare. We study the performance of University students taking at most one exam per day in the final two weeks of the semester. Exams are scheduled at different time-of-day in a quasirandom fashion. We find that peak performance occurs around lunchtime (1.30pm), as compared to morning (9am) or late afternoon (4.30pm). This inverse-U shape relationship between time-of-day and performance (i) is not driven by stress or fatigue, (ii) is consistent with the idea that cognitive functioning is an important determinant of productivity and (iii) implies that efficiency gains of up to 0.14 standard deviations can be achieved through simple re-arrangements of the time of exams. While researchers have shown that biological factors influence changes in productivity between day and night shifts, we establish that such relationship is also important within a standard day-light shift. A simple back of the envelope calculation applied to an external context that is likely to benefit from our results, elective surgeries, suggests that a different sorting of the cognitive tasks performed by surgeons may lead to an increase in the number of patients saved. |
| Keywords: | time-of-day, cognitive tasks, productivity, efficiency gains, circadian rhythm |
| JEL: | I20 I24 J22 J24 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13657&r=all |
| By: | Oriol Aspachs; Ruben Durante; Alberto Graziano; Josep Mestres; José Garcia Montalvo; Marta Reynal-Querol |
| Abstract: | Most official economic statistics have a relatively low frequency. The measures of inequality, in particular, are not only produced with low frequency but also with significant lags. This poses an important challenge for policymakers in their objective to mitigate the effects of a rapidly moving epidemic as the COVID-19. We propose a methodology for tracking the evolution of income inequality in the aftermath of the COVID-19 pandemic using high-frequency, high-quality microdata from bank-records. Using this approach we study the evolution of inequality since the beginning of the COVID-19 pandemic, and its effect on different groups of the population. First, we show that the payroll data managed by banks are an extremely useful source of information to detect, timely and accurately, changes in the distribution of wages. Our data replicate very closely the distribution of wages from the official wage surveys. Second, we show that, in absence of public benefits schemes, inequality would have increased dramatically. The impact of the crisis on inequality is explained mostly by its effect on low-wage workers. Pre-benefits wage inequality has increased significantly among foreign-born individuals, and regions that have a heavy economic dependence on touristic activities. Finally, we show that the public benefits activated soon after the beginning of the pandemic have substantially mitigated the impact of the COVID-19 crisis on inequality. |
| Keywords: | inequality, COVID-19, administrative data, high frequency |
| JEL: | C81 D63 E24 J31 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1741&r=all |